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T-Mobile (TMUS) to Downsize Workforce to Cut Operational Costs
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T-Mobile Us, Inc. (TMUS - Free Report) has made the difficult decision to lay off workers. This is because the company is going through various organizational shifts. After it inked the takeover of Sprint, it had around 80,000 workers. It finished 2021 with 75,000 workers.
TMUS has made layoffs in the engineering group and network division. Both executives and managers have been adversely impacted by the move.
T-Mobile has incurred significant costs to boost revenues and obtain customers. But this has not translated into increasing shareholder return. The company’s bottom line numbers have not improved to a great extent even after the introduction of various low-priced service plans for small business enterprises and customers.
The company is offering the same services at a discounted rate for three years post-merger. The revamped T-Mobile competes for consumers at all price points. Customers, including prepaid and Lifeline, have access to the same 5G network and services. The combined company’s network has 14 times more capacity than on a standalone basis, which enables it to leapfrog the competition in network capability and customer experience.
Furthermore, T-Mobile launched new Magenta for Business plans, with Microsoft 365 included at no extra charge on up to two lines per account. All these have affected the bottom line.
Image Source: Zacks Investment Research
Moreover, T-Mobile along with other wireless carriers operate on leasing strategy to bring aboard more customers, thereby exposing them to credit risk. Since, at present the global market is very volatile, highly leveraged companies are expected to have a contraction in their output and growth. Residual values of surrendered phones, which the companies look to sell in other markets, have a high chance of liquidity risk if things do not go as planned.
Such challenges are likely to translate into sudden revenue decline for the company. Probably this is the driving factor behind the retrenchment as it aims to reduce operational costs.
The stock has gained 5.6% in the past year compared with the industry’s decline of 21%. T-Mobile currently carries a Zacks Rank #3 (Hold).
Globant S.A. (GLOB - Free Report) is a better-ranked stock in the broader Zacks Computer and Technology sector, sporting a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings has been revised upward by 0.8% over the past seven days.
Globant delivered a trailing four-quarter earnings surprise of 3.2%, on average. It has lost 38.3% in the past year.
Harmonic Inc. (HLIT - Free Report) has a Zacks Rank #2. The consensus estimate for current-year earnings has been revised upward by 17.1% over the past 30 days.
Harmonic delivered a trailing four-quarter earnings surprise of 79.3%, on average. It has gained 19.6% in the past year.
Thermon Group Holdings, Inc. (THR - Free Report) , sporting a Zacks Rank #1, is another solid pick for investors. The consensus estimate for Thermon’s current-year earnings has been revised upward by 9.7% over the past seven days.
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T-Mobile (TMUS) to Downsize Workforce to Cut Operational Costs
T-Mobile Us, Inc. (TMUS - Free Report) has made the difficult decision to lay off workers. This is because the company is going through various organizational shifts. After it inked the takeover of Sprint, it had around 80,000 workers. It finished 2021 with 75,000 workers.
TMUS has made layoffs in the engineering group and network division. Both executives and managers have been adversely impacted by the move.
T-Mobile has incurred significant costs to boost revenues and obtain customers. But this has not translated into increasing shareholder return. The company’s bottom line numbers have not improved to a great extent even after the introduction of various low-priced service plans for small business enterprises and customers.
The company is offering the same services at a discounted rate for three years post-merger. The revamped T-Mobile competes for consumers at all price points. Customers, including prepaid and Lifeline, have access to the same 5G network and services. The combined company’s network has 14 times more capacity than on a standalone basis, which enables it to leapfrog the competition in network capability and customer experience.
Furthermore, T-Mobile launched new Magenta for Business plans, with Microsoft 365 included at no extra charge on up to two lines per account. All these have affected the bottom line.
Image Source: Zacks Investment Research
Moreover, T-Mobile along with other wireless carriers operate on leasing strategy to bring aboard more customers, thereby exposing them to credit risk. Since, at present the global market is very volatile, highly leveraged companies are expected to have a contraction in their output and growth. Residual values of surrendered phones, which the companies look to sell in other markets, have a high chance of liquidity risk if things do not go as planned.
Such challenges are likely to translate into sudden revenue decline for the company. Probably this is the driving factor behind the retrenchment as it aims to reduce operational costs.
The stock has gained 5.6% in the past year compared with the industry’s decline of 21%. T-Mobile currently carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Globant S.A. (GLOB - Free Report) is a better-ranked stock in the broader Zacks Computer and Technology sector, sporting a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings has been revised upward by 0.8% over the past seven days.
Globant delivered a trailing four-quarter earnings surprise of 3.2%, on average. It has lost 38.3% in the past year.
Harmonic Inc. (HLIT - Free Report) has a Zacks Rank #2. The consensus estimate for current-year earnings has been revised upward by 17.1% over the past 30 days.
Harmonic delivered a trailing four-quarter earnings surprise of 79.3%, on average. It has gained 19.6% in the past year.
Thermon Group Holdings, Inc. (THR - Free Report) , sporting a Zacks Rank #1, is another solid pick for investors. The consensus estimate for Thermon’s current-year earnings has been revised upward by 9.7% over the past seven days.